Re: Big purple digit

In article <memo.20080416190216.1884A@[EMAIL PROTECTED]
>,
 jgd@[EMAIL PROTECTED]
 (John Dallman) wrote:

> In article <ddfr-29A99D.00532115042008@[EMAIL PROTECTED]
>, 
> ddfr@[EMAIL PROTECTED]
 (David Friedman) wrote:
> 
> > I thought earlier in the thread you said something about people 
> > mistakenly believing that money is real, but didn't explain what you 
> > meant--either what they believed or why it was mistaken.
> 
> I did. Some UK politicians, mostly from the Conservative Party, 
> sometimes act as if money - all money, not just cash - were a real 
> material substance, subject to conservation laws and the like. Which it 
> isn't: stock markets, currency exchange and the like create at least 
> nominal money from nowhere, or make it disappear, when stock prices or 
> exchange rates change. 

I'm still not sure I understand you--are you talking about money or 
value? The stock market doesn't make money appear and disappear, nominal 
or otherwise. I'm not sure in what sense currency exchange does either.

Fractional reserve banking changes the total money stock, at least by 
some definitions. And currency can of course be destroyed, although 
creating it without government permission risks legal consequences.

-- 
 http://www.daviddfriedman.com/
http://daviddfriedman.blogspot.com/
 Author of _Harald_, a fantasy without magic.
 Published by Baen, paperback in bookstores now